Consultants expect more plan sponsors to adopt personalised defaults and multi-sector income strategies
Plan sponsors are expected to expand the use of blend target date funds (TDFs) and introduce private market investments—particularly private credit—into defined contribution (DC) plans, according to PIMCO’s 19th Annual DC Consulting Study.
Nearly two-thirds of institutional consultants and 80 percent of aggregators surveyed forecast increased implementation of blend TDFs, reflecting growing demand for flexible asset allocation strategies.
The study also found a clear shift toward personalised investment solutions.
Aggregators reported plans to increase their focus on advisor managed accounts (AMAs), personalised TDFs, and dual qualified default investment alternatives—products that start as traditional TDFs and transition to more tailored strategies as retirement nears.
Both consultants and aggregators indicated they will prioritise additional research and ratings around blend TDFs in the coming year.
Published results reflect insights from 35 consultants and advisory firms serving more than 27,000 clients and managing over US$8.8tn in DC assets.
According to the findings, roughly half of consultants and one-third of aggregators expect sponsors to integrate private market investments into their asset allocation offerings in the next year, with private credit noted as the most likely entry point.
“We have seen the emergence of new themes in our survey as the industry continues to evolve,” said Rene Martel, managing director and PIMCO’s head of Retirement.
He noted that this year, blend TDFs and private investments have joined other priorities as plan sponsors broaden their offering to address the diverse needs of their participants.
The research identified Collective Investment Trusts (CITs) as the top sponsor priority, followed by evaluations of both guaranteed and non-guaranteed retirement income strategies.
When evaluating guaranteed income products, consultants showed a clear preference for opt-in structures offering liquidity, fee transparency, and immediate income upon annuitisation.
The number of fund options in DC plans remained stable, with two-thirds of the offerings focused on active management.
Consultant preferences leaned more heavily towards active strategies in categories such as fixed income, capital preservation, and inflation mitigation.
Other notable trends include a move from passive to active fixed income and from active to passive equity, as well as growing adoption of active multi-asset inflation strategies.
The removal of traditional balanced funds continues.
Interest in multi-sector fixed income is increasing due to its perceived benefits in wealth accumulation and income consistency.
Consultants cited the potential for broader opportunity sets, sector rotation, and higher yield generation as key factors supporting this approach for retirement-focused savers.
